Much like the global economic landscape, Canada’s economy is constantly in flux. The Gross Domestic Product (GDP) serves as a reliable indicator, providing insights and data into the economic health and prospects of the Canadian economy. 

The most recent figures indicate that GDP grew 0.2% in July, following a 0.1% decline in June. The quarterly report, released on August 29th, revealed that GDP contracted 0.4% in the second quarter of 2025. This post provides a greater understanding of Statistics Canada’s latest numbers and their implications for borrowers in the Canadian market.

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Key Takeaways

• The latest GDP numbers show the Canadian economy grew 0.2% in July.
• In 2024, GDP grew 1.5%.
• Preliminary estimates indicate that the economy is expected to remain unchanged in August. 

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Latest GDP Numbers in Canada

Gross domestic product (GDP) measures Canada’s economic activity based on the total value of all goods and services produced in Canada over a specific period. Dividing the total GDP by the population reveals the average economic activity each citizen contributes, referred to as GDP per capita. 

When tracked over many years, GDP can show whether Canada’s economy is growing or contracting. When GDP is on the rise, it is a sign of good economic health. Meanwhile, contracting GDP indicates that Canada is not working at full capacity or might be heading toward, or is already in, an economic recession. 

Statistics Canada reported that the Canadian economy increased 0.2% in July, following a 0.1% decrease in June.

Sectors that saw contractions include:

• Retail trade declined 1.0% softening growth in the overall economy.

Sectors that saw gains include:

• Gross producing industries rebounded, increasing 0.6% in June following 3 consecutive months of contractions. 
• The mining, quarrying and oil and gas extraction sector rose 1.4%.
• Transportation and warehousing increased 0.6% following a 0.7% decline in June. 
• The manufacturing sector rose 0.7%, partially offsetting the 1.5% decline in June. 
• Wholesale trade increased 0.6%, up for the third consecutive month.
• Real estate and rental and leasing grew 0.3% for the fourth consecutive month.

GDP Second Quarter of 2025

Statistics Canada’s Q2 GDP data recorded a 0.4% decline following a 0.5% gain in Q1. This contraction was driven by significant declines in the export of goods and a decrease in business investment in machinery and equipment. 

Exports declined 7.5% after increasing 1.4% in Q1. International exports of passenger cars and light trucks fell 24.7% due to the tariffs imposed by the US. Exports of industrial machinery, equipment and parts fell 18.5% and travel services declined 11.1%.  

International imports declined 1.3% in Q2 due to the counter-tariff response by the Canadian government. Imports of passenger vehicles fell 9.2% and travel services fell 8.5%.

Canada’s Economy Grew 0.2% in July, With Unchanged Growth Projected in August

July’s GDP grew 0.2%, with 11 of 20 sectors expanding this month. According to Statistics Canada’s preliminary estimate for August, GDP is expected to remain unchanged. This advanced estimate is due to increases in wholesale trade and retail trade offset by decreases in mining, quarrying, and oil and gas extraction, manufacturing, and transportation and warehousing.

Housing Investment Increases 

Residential investment, a key driver of the Canadian economy, increased 1.5% in Q2. This was driven by an increase in new construction, up 3.7% as higher work put in place and absorptions for apartments, primarily in British Columbia, fuelled growth. Ownership transfer costs rose 1.0% in Q2, recovering slightly from the significant 16.3% decline in Q1. Meanwhile, residential renovations fell 1.1%.

Real Estate Rental and Leasing vs. Home Sales

The real estate rental and leasing sector rose 0.3% in July for the fourth consecutive month. Leading growth was higher activity at the offices of real estate agents and brokers and activities related to real estate (+3.6%). This marks the fourth consecutive monthly increase, reflecting rising home resale activity across the country, particularly in the Greater Toronto Area and British Columbia. Legal services, which derive a significant portion of their revenue from real estate transactions, increased by 0.5% in July.

Household Spending Increases 

Household spending rose 1.1% in Q2, after an increase of 0.1% in Q1. Growth in household spending was primarily driven by new trucks, vans and sport utility vehicles (+5.6%). This was followed by a 1.3% increase in insurance and financial services, and a 0.9% increase in food and beverage services. These were offset by reduced spending on electricity (-3.2%) and alcoholic beverages (-3.9%).

Frequently Asked Questions

Final Thoughts

The latest GDP numbers paint a complex picture of the Canadian economy. Future rate markets and economists are pricing in a 50% chance of another rate cut for the October announcement.

With the economy reacting daily to interest rates, this may be an opportune time to prepare your finances if you are looking to purchase a home or renew or refinance your mortgage. Reach out to nesto mortgage experts to understand your borrowing capacity and solidify your mortgage strategy.

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At nesto, our commission-free mortgage experts, certified in multiple provinces, provide exceptional advice and service that exceeds industry standards. Our mortgage experts are non-commissioned, salaried employees who provide impartial guidance on mortgage options tailored to your needs and are evaluated based on client satisfaction and advice quality. nesto aims to transform the mortgage industry by providing honest advice and competitive rates using a 100% fully digital, transparent, seamless process.

nesto is on a mission to offer a positive, empowering and transparent property financing experience – simplified from start to finish.

Contact our licensed and knowledgeable mortgage experts to find your best mortgage rate in Canada.

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